Because of their greater need, the elderly and people with disabilities have greater health care costs. The
elderly’s per capita spending on drugs is over three times higher than that of non-elderly adults. While only 12
percent of the entire population, the elderly account for about one-third of drug spending.

Over one-third (38%) of Medicare beneficiaries will spend more than $1,000 on prescription drugs. Less than
5 percent will spend more than $5,000.

The average total drug costs for Medicare beneficiaries is estimated to approach $1,100 in 2000. Over 85
percent of Medicare beneficiaries will spend money on prescription drugs, and more than half will spend more than
$500.

Spending is higher for women. Because of their greater likelihood of living longer and having chronic
illness, women on Medicare spend nearly 20 percent more on prescription drugs than men.

Out-of-pocket spending is also high. In 2000, Medicare beneficiaries are estimated to spend about $525 on
prescription drugs out-of-pocket. This spending is linked to insurance coverage -- it is much higher for those
with no coverage ($800) and people with Medigap ($650) than those with retiree coverage ($400).